Between the new progressive income tax rate schedule introduced by state Sen. Don Harmon (D-Oak Park), Governor Pat Quinn’s proposal to make the temporary 67% tax hike permanent and the new Madigan tax, this has been a tough, disappointing week for Illinois taxpayers.
The Madigan tax seeks to implement a graduated income tax by placing an additional 3% tax on income greater than $1 million. We think that’s a bad deal for the people of Illinois.
Tantamount to a tax on those who are providing the jobs Illinoisans desperately need, this punitive tax on a highly-mobile group of people largely comprised of job creators and small-business owners who operate pass-through entities (meaning the business taxes are paid via the owner’s individual income tax). The folks at the non-partisan Tax Foundation calculated that, in fact, fully 61% of Illinois employers are pass-through entities. Additionally, 11,208 of them have an adjusted gross income above $1 million. That’s 11,208 business-owners who would be adversely affected by the Madigan tax.
Not to mention the problems with the amendment itself, which seeks to write a percentage (3%) and a dollar amount ($1 million) into the Illinois Constitution. What does it matter? While $1 million sounds like a considerable sum, and it certainly is, what will that look like in time? Consider that $165,260 in 1970, when the current Illinois Constitution was written, would be worth $1 million today.
A principal precept of medical ethics is the maxim “primum non nocere,” meaning if you do nothing else, first do no harm. Elected officials would do well to consider this the first rule of lawmaking.
Additionally, while the amendment would dedicate the additional revenue generated exclusively to education, what’s to prevent it from merely supplanting, rather than supplementing, current education funding? The answer: nothing. Once again, Springfield is asking Illinoisans to send more money saying, “trust us.”
The questions is, should we?